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Interpretation of section 10(2)(vib) of the Income-tax Act regarding entitlement to development rebate for motor-cars and cycles purchased by a public limited company for business purposes. Analysis: The case involved a public limited company engaged in manufacturing cloth that purchased motor-cars and cycles for business use and claimed development rebate under section 10(2)(vib) of the Income-tax Act. The company asserted that the purchased items qualified for the rebate as they were used wholly for business purposes. However, the Income-tax authorities allowed normal depreciation but denied the development rebate, arguing that the purchased items did not constitute a plant as required by the section. The crux of the matter was whether the term "plant" in the context of section 10(2)(vib) included motor-cars and cycles. The Tribunal disagreed with the Income-tax authorities and held that the company was entitled to the development rebate as the motor-cars and cycles were considered "plant" within the meaning of the section and were installed after the specified date, being wholly used for business purposes. The Department contended that while vehicles could be included in the definition of "plant" under section 10(5), they were not intended to be covered under section 10(2)(vib). The Department argued that for an item to be considered "installed," it must be fixed in position when used, which was not possible for vehicles. However, the Court rejected this argument, emphasizing that the definition of "plant" in section 10(5) explicitly included items like vehicles for business use. The Court interpreted "installed" to also mean "inducted or introduced," allowing for a broader understanding that encompassed items like vehicles that may not be fixed in position when used. Consequently, the Court answered the question of whether the company was entitled to the development rebate for the motor-cars and cycles in the affirmative. The Commissioner was directed to pay the costs of the company, affirming their entitlement to the rebate under section 10(2)(vib) of the Income-tax Act.
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